Lotte Chemical to Acquire 56.19% Stake in Engro Polymer

Lotte Chemical Pakistan Limited has signed a Share Purchase Agreement (SPA) with Engro Corporation Limited to acquire its entire 56.19% holding in Engro Polymer & Chemicals Limited for Rs 19.7 billion. The agreement, dated August 31, 2026, covers 510,733,455 ordinary shares in Engro Polymer at a purchase price of Rs 38.60 per share.

The transaction was disclosed through separate notices filed by Lotte Chemical Pakistan, Engro Corporation and Engro Polymer with the Pakistan Stock Exchange (PSX) on September 1, 2026. Under the agreement, Lotte Chemical will purchase approximately 56.19% of Engro Polymer’s issued and paid-up ordinary share capital, giving it a controlling interest in the Pakistani polymer producer.

Engro Corporation is wholly owned by Engro Holdings Limited, which confirmed that the shares represent its subsidiary’s entire investment in Engro Polymer. Engro Polymer said it became aware of the transaction through a notification from Engro Corporation on August 31.

The proposed acquisition remains subject to several conditions. These include fulfilling the terms outlined in the SPA, obtaining applicable corporate and regulatory approvals, securing required consents and satisfying other customary closing conditions. Lotte Chemical also highlighted regulatory approval and fulfillment of the agreement’s conditions as key steps before completion.

The transaction follows an earlier development in March 2026, when Lotte Chemical Pakistan submitted a non-binding proposal to Engro Corporation to acquire approximately 56.19% of Engro Polymer’s issued and paid-up share capital. The latest SPA converts that earlier proposal into a formal share acquisition agreement, although completion remains dependent on the required approvals.

Lotte Chemical Pakistan was incorporated on May 30, 1998. The company’s primary business is the manufacturing and sale of Pure Terephthalic Acid (PTA), an important raw material used in polyester production.

Engro Polymer & Chemicals, established in 1997, is a major Pakistani producer of Poly Vinyl Chloride (PVC), Vinyl Chloride Monomer (VCM), caustic soda and other related chemicals. The company also generates power and supplies surplus electricity from its power plants to Engro Fertilizers Limited.

Engro Holdings, formerly known as Dawood Hercules Corporation, serves as an investment holding company with interests across subsidiaries and associated businesses.

The acquisition could broaden Lotte Chemical Pakistan’s footprint beyond PTA into PVC, VCM and chlor-alkali chemicals, potentially creating operational and commercial synergies across its chemical portfolio.

Product & Chemical Price Impact

The acquisition is strategically positive for PVC, VCM and caustic soda, as Lotte Chemical gains control of an established integrated chemicals producer. Greater financial and operational support could help Engro Polymer improve plant efficiency, reliability and long-term capacity utilization. For PVC, stronger production capabilities could increase domestic availability and limit import dependence, creating mild downward pressure on prices if output rises. VCM availability could similarly improve, supporting PVC production. Caustic soda prices may face modest pressure from potentially higher supply, although regional feedstock costs, energy prices and export demand will remain major price drivers. PTA markets may see limited direct impact.